ISER Working Paper Series 2008-27

Authors

Publication date

16 Sep 2008

Abstract

This paper estimates a model of dynamic intrahousehold investment behavior which incor-porates family ¯xed e®ects and child endowment heterogeneity. This framework is applied to large American and British survey data on birth outcomes, with focus on the e®ects of antenatal parental smoking and maternal labor supply net of other maternal behavior and child characteristics. We ¯nd that maternal smoking during pregnancy reduces birth weight and fetal growth, while paternal smoking has virtually no e®ect. Mothers' work interruptions of up to two months before birth have a positive e®ect on birth outcomes, especially among British children. Parental behavior appears to respond to permanent family-speci¯c unobservables and to child idiosyncratic endowments in a way that sug- gests that parents have equal concerns, rather than e±ciency motives, in allocating their prenatal inputs across children. Evidence of equal concerns emerges also from the analysis of breastfeeding decisions, although the e®ects in this case are weaker.